HK exports in 2019 record sharpest drop in a decade at 4.1 per cent amid US-China trade war

01-Feb-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Hong Kong exports recorded their sharpest drop in a decade in 2019, down 4.1 per cent under the shadow of the US-China trade war.

The year-on-year drop, together with a 6.5 per cent decrease in imports, resulted in a trade deficit of HK$426.8 billion (US$55 billion) last year, the Census and Statistics Department said on Thursday.

A government spokesman said this was the sharpest annual decline in exports since 2009.

“Hong Kong’s export performance is still subject to high uncertainties in the near term,” he said. “Attention should be paid to the coronavirus outbreak as it may weigh on the performance of some Asian economies and disrupt Hong Kong’s economic activities as well.”

He added that, though global economic conditions showed signs of stabilisation in the latter half of 2019, there were still challenges from Brexit and regional tensions.

Hong Kong was exposed to the trade war for all of 2019. The dispute, which started in the middle of 2018, came to a breakthrough last month with the signing of a “phase one” deal. Further talks between the two economic superpowers are expected to end the trade war, during which the US and China have imposed punitive tariffs on each other’s goods.

In the phase-one deal, signed on January 15, China committed to buying additional US imports worth $200 billion over the next two years on top of pre-trade-war purchases. Beijing also made commitments in areas such as intellectual property, market access, and currencies.

But the coronavirus outbreak, which originated in the central Chinese city of Wuhan in Hubei province in December, may bring further adverse impacts for Hong Kong’s economy. Nearly 8,000 people have been infected on the mainland since December last year, while the death toll stands at 170.

Hong Kong had 10 confirmed cases of the deadly viral infection as of 5pm on Thursday.

Economists feared that the outbreak, which was driving down commodity prices and placing huge swathes of Chinese territory on lockdown, meant China’s import targets would become even more difficult to achieve.

Bank of East Asia chief economist Paul Tang Sai-on on Thursday warned that Hong Kong, which counted mainland China as its biggest trade partner and had its logistics chain intertwined with it, was likely to suffer.

“The outbreak is impacting Hong Kong indirectly, such as on its business travels and purchasing activities,” he said. “The city’s trade in the second quarter stands to be hurt.”

However, he said how adversely the outbreak affects Hong Kong would depend on how long it lasts.

Medical experts forecast the outbreak could linger on for about five more months or until the weather gets warmer.

In December last year, Hong Kong’s exports rose 3.3 per cent to HK$351.3 billion after a year-on-year decrease of 1.4 per cent in November. Imports in the month fell 1.9 per cent to HK$383.8 billion from a year ago after a 5.8 per cent year-on-year decline in November. The trade deficit in December stood at HK$32.5 billion.

The government spokesman attributed the slight year-on-year rise in December exports to a relatively low base in the same month in 2018.

In 2019, Hong Kong exports to most destinations waned, including mainland China (3.3 per cent), the US (14.8 per cent), India (12 per cent), Germany (8.9 per cent), Japan (6.4 per cent) and the Netherlands (4.4 per cent). Places to which exports grew included Singapore (4.1 per cent) and Taiwan (2.4 per cent).


Category: Hong Kong

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